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China Water Affairs Forms JV with Orix and Toray

(21 February 2019, Hong Kong) China Water Affairs Group Limited(“China Water Affairs” or the “Company”; stock code: 00855.HK), a leading integrated water services operator in China, is pleased to announce that the Company has teamed up with Orix Corporation (“Orix”) and Toray Industries Inc. (“Toray”) to set up a joint venture known as Jiangxi Yinli Drinking Water Equipment Co., Ltd. ("Yinli Direct Drinking Water Equipment"), thereby actively expanding direct drinking water business and laying a solid foundation for its sustainable and healthy development.
In June 2018, the Company signed a strategic cooperation agreement with Orix and Toray. Pursuant to it, the three parties will collaborate with each other in various fields of China's water industry. Yinli Direct Drinking Water Equipment is the first project under their agreement. It will utilize Toray’s membrane filtration technology to produce direct drinking water equipment. Meanwhile, upon obtaining the relevant accreditations for direct drinking water business from the Chinese government, the Company will leverage its extensive experience and network in China’s water industry to promote this business to public facilities such as schools and hospitals, as well as hotels, office buildings and residential quarters.
The registered capital of Yinli Direct Drinking Water Equipment shall be approximately RMB 50 million. The Company will invest RMB 27.5 million in cash and hold a 55% of its equity interest. Total investment of the joint venture shall be RMB 120 million.
Due to obsolete water supply facilities like water pipelines in China, consumers were generally reluctant to drink tap water directly. Rather, they were accustomed to utilizing household water purifiers to treat water quality first, and to drink barreled or boiled water. However, this trend has changed in recent years, as more and more consumers are using direct drinking water, which means that the demand for direct drinking water in China will continue to rise and there are ample room for this market to grow further.
Mr. Duan Chuan Liang, Chairman of China Water Affairs, said, "We are very delighted to join hands with Orix and Toray to develop direct drinking water business in China. Orix is a long-term strategic partner of China Water Affairs, while Toray is an internationally renowned supplier of water treatment membrane. We hope that by combining our respective strengths, we can firmly seize the immense business opportunities presented by the domestic direct drinking water market, hence laying a solid foundation for our sustainable business development, providing safe and reliable drinking water to massive consumers, and creating greater investment value for shareholders."
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About China Water Affairs Group Limited
China Water Affairs Group Limited is mainly engaged in the provision of city water supply, sewage treatment and drainage, and related value-added services in the PRC. Currently, the Company operates in nearly 60 cities, including three municipalities of Beijing, Tianjin and Chongqing, and those in 13 provinces such as Guangdong, Jiangxi, Henan, Jiangsu and Hubei. Boasting long-standing partnerships with various local governments, the Group has firmly established a leading market position in China’s water industry.
About Orix Corporation
Orix is currently the second largest shareholder of China Water Affairs and holds 18.7% equity interest in the Company. It ranked 254th in the 2018 Fortune Global 500 List. Being the first leasing company in Japan, it carries out a variety of operations, including custodian banking, securities, insurance, leasing, investment banking, real estate and renewable energy. With extensive industry experience and knowhow gained both in Japan and overseas markets, Orix has actively expanded financial services in China and has established a long-term strategic partnership with China Water Affairs.
Toray Industries, Inc.
Toray was established in 1926 and is a multinational high-tech corporation which boasts internationally-renowned organic synthetic chemical, polymer chemical and biochemical technologies. It is one of the first enterprises in the world to engage in the development of reverse osmosis membrane technology. Besides, it possesses technological leadership in ultrapure water and desalination technology in the world. The company commenced water treatment membrane business in China in the 1980s and has focused on the expansion of household water purifier business in the country since the launch of its water purifier TORAYVINO in 2007.
This press release is issued by PRChina Limited on behalf of China Water Affairs Group Limited.
For investor and media enquiries
PRChina Limited
David Shiu / Nicole Lau / Aggie Fang
Tel: (852) 2522 1838 / (852) 2522 1368
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